By GO TAKAHASHI/ Staff Writer
February 4, 2024 at 19:04 JST
Aircraft of All Nippon Airways Co., right, and Japan Airlines Co. at Tokyo’s Haneda Airport in 2022 (Asahi Shimbun file photo)
A question that perplexes Japan’s two leading airlines is whether international airfares, which have risen substantially due to high energy prices and other factors, will remain high.
ANA Holdings Inc., which owns All Nippon Airways Co., said it expects fares to decline, whereas Japan Airlines Co. (JAL) said they are likely to stay at high levels.
In the October-December period, average passenger revenue based on distance traveled was 60 percent higher at ANA and 50 percent higher at JAL compared with the same quarter of 2019 before the novel coronavirus pandemic.
Fuel surcharges, which airlines collect from passengers under an international system in accordance with crude oil prices, have remained high.
Generally, international airfares are expected to decline because airlines around the world are adding flights to meet recovering air travel demand following the pandemic.
Kimihiro Nakahori, executive vice president and group chief financial officer at ANA Holdings, said airlines will be able to maintain airfares at higher levels than pre-pandemic years for some time to come.
However, Nakahori said airfares will eventually inch toward “normalcy,” indicating that they will decrease close to pre-pandemic levels over the long term.
On the other hand, Yuji Saito, a JAL senior managing executive officer, said airfares are not expected to fall substantially, citing the impact of global inflation and a modest pace of increase in the number of flights to and from Japan.
International operations, which generate higher revenue per passenger, are bolstering the financial performance of both ANA and JAL.
ANA, which has revised up its earnings forecast for the business year ending March, is now projecting a record operating profit.
JAL’s net profit for the April-December period exceeded the figure for the same nine-month period of 2019.
But both ANA and JAL expect demand for international air travel to remain flat.
The number of flights to and from China is increasing only slowly due to sluggish Chinese group tours to Japan. Also, Japanese are expected to refrain from traveling abroad due to the weak yen, the executives said.
JAL’s Saito said Japan is exceptional in the global market in its lackluster recovery in outbound travel demand compared with pre-pandemic years.
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